Buckley PJ Chaitram Singh , the Multinational Corporation and development of economic nationalism the case of Trinidad, Krueger press, New York. Hahlo H. R Et al Kaplinsky R Readings on the multinational corporations in Kenya, Oxford University press, Nairobi Langdon S Multinational Corporation in the political economy of Kenya, Macmillan press, London Living stone and ore H. McVikar J , the true multinational.
Multinational companies cheat Africa out of billions of dollars | Oxfam International
Manuela, Ida September 12th business journal, Nairobi Otani R. Reviewer Editor. Research Gateway. Abstract Multinational corporations sell technology - both for production and for consumption - on highly imperfect international markets to less developed countries.
Also from this project:
The future of financial companies, Macmillan press, London. Naturalism and the multinational enterprise, Oceania publication Inc, New York. These run on a spectrum from contempt for corporations as the shock troops of capitalism, destroying lives and cultures in a frenzy of corporate greed, all the way to a Blairite infatuation with their power, scale, and dynamism.
The East India Company, established in with a trading empire that encircled the globe, was the mother of modern TNCs.
When China tried to stop the firm from flooding the country with smuggled narcotics, two Opium Wars ensued. The East India Company pioneered the cycle of corruption, bubbles, and bail-outs that has been an all-too-frequent feature of the corporate landscape in recent years.
It also launched the shareholder model of corporate ownership, which allowed companies to burst beyond the bounds set by family wealth and led to an explosion of new corporations in Europe and the US in the last third of the nineteenth century. Soon, TNCs expanded into communications telephones, radio, movies , energy oil, gas, electricity , 9 and subsequently manufacturing.
In the post-war era, TNCs expanded again, even though the larger developing countries in Latin America and later Africa placed limits on their operations in order to protect nascent local industry. Many countries nationalized industries, making TNCs much more wary of investing. In the wake of the oil shock of the s and the debt crisis that followed, developing-country governments began relaxing restrictions as they competed to attract foreign investment, setting off a renewed wave of TNC expansion. Manufacturing and extractive industries led the way, but the wave really took off in the s in services like finance, management consultancy, tourism, hotels, and fast food.
As of , services accounted for 63 per cent of global foreign direct investment, more than twice the share of manufacturing 26 per cent ; the primary sector farms, mines, gas, and oil accounted for less than 10 per cent. In , nine of the top ten African telecommunications companies were from other developing countries.
Southern TNCs have also become major investors in northern economies. These firms seem less susceptible to threats to their brands, and the family-owned ones are not susceptible to shareholder pressure. Later in this chapter I look at what a new model of influencing might look like. Most modern TNCs bear little resemblance to the vertically integrated corporations of yesteryear, where, for example, United Fruit directly owned and managed its banana plantations and Ford its factories.
Global production networks accounted for 80 per cent of international trade in The political significance of TNCs is hotly disputed. That home identity shapes their corporate cultures, sometimes leading to hybrid p. Nevertheless, the top echelons of TNCs not unlike the top positions at big NGOs are staffed by an international elite that is largely insulated from local environments. They shop at the same luxury boutiques, send their kids to international schools, and move effortlessly around the globe in a business class bubble jealous?
That question is still an open one everywhere, as far as I can tell. TNCs drive change both through their normal business operations, and through their behaviour as political players.
Transnational Corporations as Drivers and Targets of Change
Many TNCs provide products and services that people living in poverty not only want, but can use to improve their lives. While many firms are diligent in obeying the law and treating their employees and customers with respect, others abuse their power, causing lasting damage to the environment, public health, and local politics. Some undermine the potential for development in a less visible way, by moving operations from one jurisdiction to another to dodge taxes and state regulation. Organizations like Global Witness publish regular exposes of more blatant forms of corporate malpractice.
Polman is active on social and environmental issues well beyond the boundaries of his company, which is why he spared the time to talk to me. We want to improve the lives of 5. We want to reach one billion people with health and wellbeing—things like handwashing.
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- TABLE OF CONTENTS.
The job of a CEO has totally changed. You have to be able to work in partnership with national governments and others. We need to use the size and scale of Unilever to get transformational i. If you want to move the world out of deforestation or transform the tea or palm oil market, you have to focus on the right 30 players. You get a flywheel going, 31 with all these alliances, getting everyone—governments, business, NGOs—together. Polman, a natural systemic thinker, emphasized the importance of feedback loops and critical junctures:.
And the world is getting more volatile everywhere. What you have to do as a company is have quick feedback loops from the market that pick up these signals, and a structure that is very agile and externally focussed. So we have delayered and decentralized to the countries. Corporations have lobbied extensively for government handouts, excessive patent protection, exclusive contracts, tax breaks, trade rules, and other state interventions that favour their bottom lines the net profit or loss on a company balance sheet.
As the banker implied, when it comes to specific regulation that restricts their freedom to operate as they please, most TNCs fight tooth and nail to block it. From laws that protect minimum wages, health and safety or freedom of association to rules on product quality, corporate governance or consumer protection, corporate stonewalling has been nearly universal. Often individual TNCs opt to keep their heads down and leave the dirty work to business associations organizations founded and funded by businesses that operate in a specific industry.
The oil companies are notorious for it.
Relative bargaining power shapes the nature of the deals struck between particular governments and TNCs. The more desperate the government, the harder the bargain a TNC can drive. Because corporations want reliable infrastructure, a healthy, educated workforce and sizable domestic markets, direct investment is heavily concentrated in richer countries. These are also the ones that can bargain more effectively: Brazil, China, India, Mexico, and the Russian Federation received 52 per cent of foreign direct investment FDI inflows to developing countries in The painful paradox is that the more a government needs foreign investment, the worse the deal it is likely to get.
However, the balance of power tends to shift over time: a TNC is most powerful in initial negotiations, less so once it has invested capital and leaving becomes more expensive. International institutions discussed in Chapter 7 often intervene to set the rules and shape the balance of power between states and TNCs. While the relatively weak UN agencies provide training and advice to buttress state negotiating and monitoring capacity, the World Bank and IMF attach riders to their loans that protect TNCs from what they view as interference by the state.
Loan conditions have required such measures as eliminating capital controls and export taxes, unilaterally reducing tariffs and privatizing state companies and public services. Corporate lobbying behind closed doors is a key driver of the way trade agreements have evolved. It turned out he was speaking for a powerful association of finance firms that was an extremely effective lobby; true to its name, the general public was largely oblivious of its existence. One of the most vigorous lobbyists at both global and national levels is the pharmaceutical industry.
In the USA, pharmaceutical companies employ 3, lobbyists and spend millions to influence national laws and the US position in trade negotiations.
The Taxation of Multinational Corporations in Developing Countries
Only after it came into effect did developing countries realize they had signed up to a major extension of corporate monopolies and high-priced drugs that would amount to a death sentence for thousands of sick and dying people. Then in nearly three dozen international pharmaceutical corporations precipitated a PR disaster by suing to overturn it, prompting an upsurge of activism that gave them such a public battering they were forced to drop the case. They continue to push countries to accept more stringent intellectual property rules that further restrain access to medicines.
Activists seek to influence TNCs with strategies that run from cooperation to confrontation. At the other, activists use litigation or public shaming to oblige governments to act. In between these poles lies the burgeoning realm of lobbying and campaigns to influence particular aspects of corporate behaviour. So we try and make sure companies hear from pension fund managers and industry peers, from shareholders at their AGMs, and hundreds of thousands of their consumers are interested enough to contact them on social media.
The surprising number of angles they hear from p. Has this become a mainstream issue? Such approaches can be effective, but as Erinch suggests, more weighty pressures are exerted by the web of regulation, relationships and responsibilities in which TNCs are immersed. Above all, corporate executives are subject to the bottom line; if the company loses money, it will go bust or be bought out.
That brutal discipline can be a source of dynamism and innovation, yet it makes businesses inherently conservative.
Levitt identifies four factors that corporations evaluate before supporting progressive change: protecting their brand especially important for consumer goods companies ; the economic cost; the likelihood of impending change in government policy companies may decide to jump before they are pushed ; and whether the firm stands to gain relative to its current or future competitors. These factors are weighed in light of longer-term tidal shifts.
Technology is the most obvious: the expansion of TNCs to their present pre-eminence has been driven by successive waves of technological p. Economic development is another, as TNCs increasingly see China, India and others as lucrative markets, rather than simply enormous reservoirs of cheap labour.